Distro has pretty much nothing to do with something working "better", all it can offer you is some options pre-configured or not. As with the kernel, you have the following options:
APM: Works perfectly fine, suspend/resume work without hitches. However, you get less battery life than with ACPI, and you lose some informative stuff (like CPU temperature readings).
ACPI: Works less than fine, especially with regard to suspending. IBM-acpi tools help a lot with configuring acpi events. If properly configure, gives better life than APM.
As for power options in the kernel, just enable speedstep-centrino (needs a recent kernel, older ones wont work with Dothan) and all the relevant options from ACPI or APM. Depending on the distro you choose, there are insctructions on what you can do in order to maximize battery life.
If you go here:
http://www.linux-on-laptops.com/ibm.html you can find many articles on getting various Linux distros and the T42 to work. If you install Gentoo, I can help you configure it as I have it on my 2378-FVU. I am also planning to post a full install article, but haven't got to it yet.
Stavros